"On July 1, the interest rate for new subsidized Stafford loans for undergraduate students will drop to 5.6% from the current rate of 6%," USA Today reports. "The reduction is part of a series of rate cuts embedded in a $20 billion college aid bill signed into law in 2007. The lower rate won't affect loans issued before July 1, says Bob Murray, spokesman for USA Funds, the USA's largest student loan guarantor. 'If you're an undergraduate with a subsidized loan and got it last year, the rate is 6% and will stay 6% for the life of the loan,' he says. Rates for new unsubsidized Stafford loans, which are available for all students, will remain at 6.8%. However, all Stafford borrowers will get a break on upfront borrower fees, Murray says. On July 1, the maximum fee that lenders will be permitted to charge on Stafford loans disbursed between July 1 and June 30, 2010, will drop to 1.5% from 2%. Upfront fees are deducted from the loan amount when the loan is disbursed."